Central Bank collects money to face any financial shocks

Sri Lanka Central Bank will be collecting some money to face any financial shocks if such crisis situation is emerged in 2017 or 2018, Governor of the bank Dr. Indrajit Coomaraswamy disclosed on Friday.

Addressing a media conference in Colombo on “Monetary Policy Review, he noted that. Sri Lanka raised policy rates 25 basis points to 8.75 percent as inflation rose to 6.8 percent in the capital Colombo on February and nation-wide inflation rose 8.2 percent, after loosening policy in November and January.He said it was raising policy rates as "a precautionary measure, in order to contain the build-up of adverse inflation expectations and the possible acceleration of demand side inflationary pressures through excessive monetary and credit expansion."

Gross official reserves were estimated at US dollars 5.6 billion at end February 2017 compared to US dollars 6.0 billion at end 2016, while the Sri Lankan rupee depreciated by 1.2 per cent against the US dollar during the year up to 22 March 2017, Dr. Coomaraswamy added.

He noted that that the aim of the Government is to raise foreign reserves to $7.5 billion by end 2017, raising $1 billion from a syndicated loan and a sovereign bond of $1.5 billion.

Government would be able to receive earnings of over $2 billion from the sale of non-strategic state assets such as the Hambantota Port, Mattala Airport and divestment of hotels and commercial property, he pointed out.

China Development Bank will provide a loan of $200 million he said noting that the loan is part of government’s fundraising efforts to invest in infrastructure and other development work.

The country will receive $100 million within three weeks, $300 million in 3 months and $700 million before the end of this year , from the syndicated loan , he disclosed.